and work we still have to do as a nation. great progress is achieved, but there's so much ago. he makes a stop and think we've done more than we really have. >> baratunde thurston, "how to be black" is the name of the book. this is booktv on c-span 2. >> joseph stiglitz, author of "the price of inequality" and paul krugman, author wrote train to talk about problems facing the u.s. economy for about an hour 45 next on booktv. [applause] >> well, thank thank you very m. thanks to the passionate
attitude and technology in shakespeare books for hosting the event this evening. i also am very excited. i think we are all very excited to see probably two people who i would say are unquestionably the most cited economists in the world today. [applause] in addition to being most cited, and as you all know, those are noble laureates, i would have to say from the vantage point of the institute of economic thinking that if i were to nominate two people as being the most courageous economists in the world and the most impactful, the subpoena to find a list. so we're very excited to be part of this conversation. [applause] as you know, each of them has written a book that pertains to
our current challenges and circumstance. joe stiglitz spoke, "the price of inequality" and paul krugman's book, "end this depression now!" are part of your goodie bag tonight. therefore on behalf of them i will thank you for your peach image. but i think we should move her to the discussion. but start with paul. you talk about the title of your book, "end this depression now!." a lot of people don't believe we could end this depression now. what agency do human beans have two take on this challenge? >> i spent a fair amount of time looking back at the brick massively same kind of animal is the great depression. obviously not as bad as the great depression. not as bad as the great depression, the really pretty
bad and recognize the same kind of thing. the technology is still there. human skills still there, but were not actually making use of them. if you go back to the 1930s, you find a lot of people make any argument that there were no easy answers, no quick fix and that is absurd to think you could quickly get out of this, absurd to think particularly of the need is an increase in government spending. this article is in 1839 published at the economic regime that they really is a fundamental problem in what we really need to do to make progress in structural reform and unemployment benefits and things like that. and then along came not actually the work, purchased the work came in europe and the united states began preparing. we begin to build up in 1839 and within two years, unemployment
unemployment -- had increased by 20%, equivalent of adding 27 million jobs right now. it turned out the only problem is there's understanding the spending and the economy and there was the one player in the economy who could and should have been spending more but the government and thanks to adolf hitler, on the second it did what he should've been doing all the blog it's the same thing right now. there's overwhelming confirmation that this is a time when having the government spend more would be really free. it would be putting people to work better analyze unemployed. they'd be basically doing nothing and it's actually very easy technically in our politically because it's hard to persuade people of the need to do that, which is why some of us write books. >> now, some of those who would argue with you would say you do
the spending, like a sugar bill, gives you a boost in any fallback. but we didn't call back in the depression after world war ii. >> i think it's a very interesting story. why did world war ii -- why did we fight back and the depression from which lots of people thought we would. montgomery ward is a major store chain, but the president of montgomery ward would come back, so he hoarded cash instead of building stores and kept him waiting for the depression to come back by the time it came clear it wasn't going to come if they have lost a position marketplace. not a question that's been studied as much as it should've been. but the best story right now about what is really going on them which is also the best story about what was going on in the 1930s but that was about
excessive privacy or deaths. if you have a gut level that when a burst of people stranded with too much debt. what happens during world war ii was a head first of all it. of the planet attachmate easy to it easy to pay down debt. there were more or less forced to pay down debt. plus a significant amount of inflation, so the real value of the debt sale. so you came into world war ii with quite high levels of private debt and household debt relative to income. by the time the war is over at this postbubble surrender half before the war. so you solve the problem. the thing you can do if your problem is excessive indebtedness, which you want is a strong economy and maybe a little bit of inflation, but certainly a strong economy so people a chance to pay that debt down and it does not come back. it's not a sugar high. it's more like a diet of
essential ministries that enables you to recover ailments. >> is a couple of other factors that i would add. there is in some sense for savings during the war and that meant after the war people had very strong balance sheets, which they can spend. at the same time, part of the problem at the time of the great depression was that we had to move people from agriculture. we had been a success because we had increased agricultural product to be enormously in the 19th century and in the 19th century was to 60, 70% of people working on farming. by 1930 was down to about 25, 30%. today we have 2%. we had to move them into manufacturing from rural to urban you didn't have the resources to do it.
in the war they had to move because that's what the plans were. we begin to equip people with this little of the century industrial economy. and then we did something important. we have the g.i. bill. so we gave them the education that they been suited for this new economy. so it's not just that the government was spending. the government unintentionally in a sense was restructuring the economy, making it prepared for the postwar period. hatfield also has a very interesting book on the history of this period. he also pointed out in the period of the 30s the government was doing a lot of investment in gross and that increase productivity. after the war, that productivity actually increased returns to
investment in the private sector. so i created a context. you know, we had -- public spending had provided a context in which private investment have a higher return. >> in general, we've got this notion that the public sector and private sector are always in competition. public investment is complementary in that there's a lot of things that people will do if they believe there's adequate transportation and they believe the power network is adequate and they're going to have skilled workers available because they've had good education. so i tend to be stripped down to the minimal story in a minimal story would be just about the debt. of course all of this reinforces what they're doing right now.
we have the states and local governments canceling infrastructure projects because revenue is depressed because the economy is depressed, which is the opposite of how we got out of the great depression. >> in fact, we haven't focused on talks about austerity. >> if you look at the measurements -- >> 700,000 fewer public employees than we did before the crisis when if we had a normal expansion, we would've gained about 1.2 million employees. so there is a big gap there caused by this kind of austerity that we are the house. to me, the real danger is if the romney gets elected, they might actually do what they say they might do. >> that is remarkable feature of the political environment pitcher best hope is one of the candidates is that line carries
teeth. >> we sit now in what feels like prolonged stagnation. joe, you've written a book on inequality. this could not be a positive development for the distribution proceeds to have the called the reserve army of the unemployed driving wages down, weakening the bargaining power. >> inequality has become a serious problem in the united states. it is interesting while polls are arguing in a good a long time, it gotten so serious that even economists realize it's a serious problem. when they say serious problem coming got to believe it. not our colleagues. but the magazine's economists. >> it's my job to take them on.
you guys take on the magazine. one of the reasons that it weakens the economy, you know, paul emphasized the problem right now is lots of demand, lack of total demand that means people are not buying as many goods in the economy and capacity to produce and at least one employment. one of the problems if you transfer money from the bottom of the economic pyramid to the top, the people at the top say that the 15% of their income. people at the bottom spend everything. they need to spend everything to get by. so when you engage in that, it lowers total aggregate demand. there is now a vicious cycle going on that because of the high unemployment, we just are being ripped down. the share of wages is weaker than otherwise would be.
and so, that in turn weakens demand. even before the crisis, incomes in the middle were not doing well. income today is lower than it was a decade and a half ago. so there is a vicious cycle in place, where a weak economy leads to more inequality leads to a weaker economy. >> i don't want to go too deep. i'm not totally persuaded as it turns out because in fact the overall savings rate, even now, is still well below what it was 30 years ago. he sat like a percent private savings and even now it was zero for a while. is it wrong for now. so there's some pain that the
debt issues, the inequality leads people to go into debt to attempt to maintain a middle-class there, above all to have the house in in middle-class neighborhoods so kids can have a decent school. i think there's a story that went through debt rather than a simple mechanical advantage. >> the point that we should be aware that a lot of discussion talks about american consumers coming back. before the crisis, the savings rate in the united states with zero. we hope it won't come back. >> i was obviously not sustainable in one of my predecessors, chairman of the council said that is which is not sustainable will be sustained. >> -- is something. it will stop.
[laughter] .. we'll see savings rates increase from the current 4-1/2% level. and that's another reason why we should be worried over this long recession, that the restorative forces in place on their own are very weak. >> with regard to inequality, in your study, we talked about the long slump as a contributing
effect. what other dimensions do you see as causing the inequality? >> well, one of the -- there are lots of causes of inequality and lots of dimensions to inequality. the income going to the top, the hollowing out of the middle and the increasing number of people in poverty at the bottom. each of them has their own causes. multiple causes. at the top, which has gotten a lot of attention, the 99% and 1%, one of the factors -- even the economists now recognize -- and i talk about in the book -- is that a lot of the income at the top comes from what economists call rent, seeking. that is to say, things like monopoly power, activity busy people are trying to grab a
larger share of the pie rather than trying to make the economic pie bigger. other examples besides -- the month noel knopplyist gets his profit by reducing production rather than -- restricting production. other examples were the exploitative activities of the financial sector, where they were moving money from the bottom of the pyramid to the top, through abusive predator practices, predator lending, a whole bunch of things that have now been exposed. that wasn't making the economy more efficient. it was making it even more unstable, and -- paul wolfer said there wasn't a single financial innovation that led the increase in the productivity of the american economy except the atm machine. but the atm machine is a british innovation, not american, and since he said that, they raised
my fees from $1 to $3. >> that's another example. the ceos have taken advantage of deficiencies in correspondent governance to increase the sayre of the corporate income they get. no evidence they've become that much more productive or that much more productive than ceos in other parts of the world. but what they have become is better at getting a larger share of the pie. you have to admit there's a certain amount of cleverness in that. but it hasn't led our xi to be mow efficient. in fact money that could have been into investment and r & d is spent on their salaries. >> i like too do a division. take the u.s. economy since the early postwar years, and divided in half. the first year was the legacy of the new deal, which was an era
of -- where corporations viewed themselves as more of a coalition of stakeholders rather than just ruthless capitalism. fairly strong labor unions, of course, and then the second era, which is the -- this era of capitalism, deregulation, capitalism tooth and claw, and at least talk to people -- an anchor on cnbc, they know that transition from the old think to the new, let to an explosion in the economic growth and higher efficiency and must have made everybody better off. and it's actually not true. growth was slower in the second half, of course the big differences is that the benefits of growth stopped being spread to the general population. all went to a relative handful of people at the top. not because of "occupy," but they're actually setting those
too low. the 1% it's the .1% who are the people who -- and in the earlier period -- i -- >> in an earlier period, every group in the population was greg, but the bottom part was growing faster than the top. today it's not that way. and gdp doesn't really give you a good measure of what's the opening the economy, to our society. so while that one-tenth of 1% has been doing well, median income is lower than it was a decade and a half ago, median wealth is as low as it was two decades ago. so all of the increase of wealth has gone to the top. so, it's clear that in these ways our economy hasn't been functioning as well as it did in that period in which we were growing together.
>> paul, you're one of the leading thinkers about what they call new trade theories. and international issues relates to inequality. we have seen a tremendous amount of fights in ohio between romney and obama about the role of china. >> several different pieces there. one of them -- just coming back to, why is our economy depressed? we used to have much higher savings rates than we do now. how were we able to have full employment, given that? we did not have large budget deficits. what makes it so much harder? and it's adding up. it gives the persistent trade deficit. we used to not have one and now we do, and it is a big drag on the economy.
the trade deficit is significantly down. we have had some -- the u.s. has actually become more competitive, but that's a front on which we need to work. there is a -- the trouble is the political debate has not kept up with the reality. at it all about china. actually, china is no longer the core of that. it's a much broader set of countries. those need to be work on. i hope the next president, instead of not just crude china bashing but what to do to have a world that is no -- we don't have everybody trying to run a trade surplus, which the germans believe is possible but the rest of us don't. then the issue of trade and income inequality, and a lot of -- used to be we traded with countries that were similar.
and that presumably had relatively effect on income. if you make -- if you send auto parts to canada and conditioned sends assembled cars back to the ute, that knowing going to make a difference. that it increased efficiency. now we do a lot of trading with countries that are substantially lowering and labor intensative products through skilled differential. the highly educated do better. most of the increase in inequality is not highly educated versus less educated. i would write papers -- 18 years ago -- 17 years ago -- saying that trade isn't that big factor in inequality because the number us are just not big enough. which was true 17 years ago. but canada, china and mexico or
a much bigger pathor in our trade than then, and that is -- what do you do about it, is the question. and there are a lot of reasons not to want to have protects. if nothing else because we're supposed to be global citizens a little bit, and for the poorest countries having access to open world markets isity camp bangladesh keeps its head before a water because of exports. the answer is to have a decent society with a safety net. >> and it's training programs and basic skills. the standard theory is that with open markets, the winners -- the country as a whole could be better off. the winners could profit over the losers but they never do, and that is really the problem.
that in fact somebodiesome of the advocates of globalize. >> at the same time that they're talking about the wonders of globalization, have been saying, to compete, you have to strip away the social safety net, and they're doubly hurting the people in the middle. >> germany is an interesting case. germany is doing relatively well in the crisis, not as well as they think they are but they're doing relatively well. and if our breaks up, they'll have problems. and amazing to watch conservatives in this country adopt germany as an icon, they've good at austerity, which they really don't. why is germany able to export so well? they pay very high wages, even by our standards. they have a very expensive welfare state to a level that
ison the wildest dreams of american progressives 'what they have is, among other things, very good technical education, very close collaboration between the educational system and industry. strong role of government, corporate gotchance which is much more like what we used to have in this country. labor is on the beards of companies, all of which suggests if you want to be a high-wage country, you want to move in the opposite direction from what the people who say we must slash social programs. you actually want a more integritied, more quo he'ssive society. >> actually the scandinavian countries have done much better in this crisis, have grown faster, and have been more stable. >> if you look at sweden, look at what they do, and -- just describe -- without saying it has anything to do with a particular country and put that in front of what is the conventional wisdom how
economics work. we would say there must be grass growing in the streets. they can't possibly survive with this economy. and i come across people who are sure it in must be a terrible situation there i said, have you ever been to stockholm, walked around? this does not look like a desperate place. looks like they're doing pretty well. >> can i come back to the issue of inequality and globalization, and talk about germany. they've done a lot of the things in the right direction, but they haven't really kept up with the scandinavian countries, and the result of that is that while 30 years ago they were in the middle of the advanced industry countries -- >> germ. [speaking in german]
-- they've now moved into the middle and the point of this is that to a large extent inequality is the result of what we do. it's not just market forces. market forces are in play in scandanavia, in germany, uk. we shape those market forces, and the way we've shaped those market forces has resulted in the most inequality of any of the advanced industrial done disprize the least equality of opportunity. very contrary to our image of ourselves, the american dream. it's really a myth. and what you've also seen over time is how countries that have imat it tate -- imitated the united states have done like the united states. uk used to be in the middle and now second the united states in terms of inequality. whereas scandanavia has kept up -- struggled and inequality
has increased a little bit, but it is still the least -- mow most equality of opportunity and the least inequality. >> i think sometimes there's a fatalism, it's a global me. nothing you can do. cannot happen, kind of relatively equal society on social justice that maybe was possible when the rest of the world was in ruins. i get that all the time. but there are countries, sand navans, that have maintained a high level of wide-spread distribution of the benefits bef growth and productivity. we do not need to be the way we are. even canada is a much less harsh unequal society than ours and there's operating in the same environment we are. they even speak the same language for the most part. so, it shows that these are
choices. and choices both about how we run markets -- markets, the distribution of market income is not something that is god given. there's a lot that influences that. it's a choice about what you do afterwards as well and whether you provide universal health coverage, decent support, provide an educational system that is well-funded for everybody, not just for people who happen to live in the right neighbor. and also the tax system -- >> also the tax system is obviously important, and all important for not only the issue of equality, inequality, and opportunity, but also for efficiency and growth. so, for instance, if you have a tax system like ours, where speculators attack at a fraction of a rate of people who work for a living, and if you can keep your money in a bank account in the cayman islands rather than in the united states, you have incentive -- the ruleses not
only give lower tax rates to those who can take -- avail themselves to these, but it distorts the economy. you wind up with more speculation, more instability, and the money isn't in the cayman islands because it grows better in the shine there. it's the lack of sunshine that is the reason that people keep their money there. >> just had a conversation with -- someone from the financial industry who was trying to make a defense about things like carried interest, which isn't even invested income but gets taxed as if it was at 15%. there's a lot of effort put in and with uncertain return, and you need to -- and my -- i couldn't help. you know what else involved a lot of work with no return? writing books. i don't get that tax break, you don't get the tax break. there we are.
>> just to clarify, this question of carried interest, when a fund, private equity heavenly fund, earns money from their customers, they earn a fee. that is their income. they're allowed to defer that. you can keep it invested in your business, and at the end, on any gain you capital gains, and now they transferred the income into capital gainses, chit is not. at it legalized fraud. [applause] >> confessions of a former hedge fund manager. health care. the phrase you used was how we manage our market. i remember one of the most
profound papers i raid on why health care should be different. why doesn't free market work for health care? what other designs do we have to take care of that? >> what -- we have this wonderful idealized version of a market, that -- in all of our textbooks, and which -- in which a market is an efficient way to organize activity. and not necessarily fair, which is a different question, but at least it's efficient. and yet such things that -- a bunch of assumptions involved. there are assumptions that everybody has the same information. there's the assumption everybody knows what they're doing. that the buyers understand what the severals are providing. that you are able to make informed decisions. and what ken allen did -- in
more than -- guess almost 60 years ago now -- he said, look, if you made a list of these things and thought about the various ways in which markets can fail, which this doesn't -- the paradigm doesn't apply, every one of those things applies to health care. health care is an absolute nightmare nor the proposition that markets are a good way to organize things. you have information of various kinds. people may have a better knowingdog -- first you have to rely on insurance. you cannot health care -- the big costs are unpredictable and huge if they occur. very few people can afford to pay out of pocket. so already you're having to rely on third-party pairs, which is a big problem for any kind of efficiency. you have a situation where, when applying for insurance, people may know more about their health condition than insurers do, on the other hand in dealing with
health care issues itself, those are highly technical and you're not going to be able to know whether your doctor is recommending the right thing. so there's a whole set of -- >> if you're a patient. >> we actually talk about health care consumers and that has become stanford standard. and people -- you've just been rushed to the million room with a heart attack. no, i think there's a better deal at the hospital down the road. and he pointed out a lot of the thing wes do -- or did some health care 60 years ago were obviously responses to this. we expect an ethical standard from doctors you don't expect from your car salesmen because a used carousalsmen who misleads you is not going to kill you.
so you have a -- what happened is -- okay. so, health care happens to be -- just on general principles, an area where free market principle does not apply. >> one thing, what's so remarkable about ken arrow, was that for 200 years, 175 years, before he had written, there was a very influential idea of adam smith that markets would read to the efficiency of the economy. and ken arrow was the person who actually proved, the circumstances under which it was correct. so anybody who talked about the wonders of the free market, he was the one who actually showed that adam smith was right. but in showing he was right, he also understood that it was only right under very restricted
conditions, and the healthcare sector was one condition in which it was never right, and similar to my own work on economics of asymmetric information -- >> core understanding. >> what it showed is the reasonable the invisible hand seems invisible is that it's not there. and this gesture is a real case on point. >> just to add, all abstract reasoning, but thenk at reality and it's overwhelming. the -- looking across countries can the united states has the most market oriented healthcare system and the most expensive without getting better results. >> we're ranked 37th in the world in the world health organization in terms of quality. >> within the united states, although medicare is very expensive, it has been much more
successful at cost control than private insurers have been, medicaid even more successful, and the crazy thing about america, we actually have everything -- all possible systems of some version here. the veterans health administration, which is true socialized medicine, the doctors are government employees -- is incredibly efficient relative to the rest of the health care system. >> you did a calculation that showed if we had a healthcare system that was as efficient as the best in europe or france, canada, germany, or the uk, take your pick, we would have no deficit -- >> baby-boom demographics. >> that's right. everyone else -- but the -- canada is just a single-payer system but not socialized medicine. it's medicare for everybody. france is complicated.
but it's a mixture of public provision, public health insurance, but it is -- much heavier hand of government than the canadian system. about the same cost as canada january system but spectacular outcome, and britain has a system which is pure socialized medicine, and the outcomes are a little better than ours, and the cost is 40% of ours. so, sure, all of these things -- if we were able to emulate these things we would be able to -- our budget problems would be gone. >> and our competitiveness -- >> and so what is -- one of our two presidential tickets, the signature proposal is to take one of the parts that works pretty well -- >> repeal what he did as a governor. >> right. romney is -- let's make sure
that nobody else gets to do what i did as the governor of massachusetts, and paul ryan wants to privatize medicare, and underfund it, which is incredible. it's a rejection of both theory and evidence. but that's pretty impressive. >> when you look at this interface between medical costs and the budget, this idea that we have to have all these commissions, like rituals about shares. why don't we just have healthcare costs commission, why don't we look that in the eye? >> that would be death panels. i mean, that's -- >> i also think, the reality of american politics is the drug industries are very influential, the insurance industry is very
influential and has beaten back reforms over and over. one position in the medicare drug bill, the bill that provided prescription drugs for medicare, and the government, the largest purchaser of drugs in the world, couldn't bargain with the drug companies, estimated to be a gift to the drug companies over ten years of half trillion dollars. now, anybody serious about dealing with our deficit should be the place to begin. how do we talk about it? >> by the way, interesting problem for -- how much imperfection are you willing to accept? there's a dilemma. a lot of us really thought that -- i really think that healthcare reform should take the form of single pair.
the medicare for all is where we should go. [applause] >> but that wasn't on the table. the question is, so we have this plan for -- plan which became the genesis of obamacare eventually, which was actually run through the market, rube goldberg defense that -- device that tries to be like single h payer and should have a public option, and then the public option gets crushed, and the important thing right now is for us to establish the principles of universal health care and once that's the place, then there will be pressure to make it more efficient, and eventually manage to squeeze the insurance companies out of their controlling roll, but first get it in place, and that more than anything else is what is at
stake in this election. >> some people would say we had, what is it, 47 million people uninsured, who came on to the rolls of the healthcare, and that transformed into the budget problem because they're paying economy prices. >> the uninsured in america are by and large young adults which are not expensive. the expensive people are the elderly, who are covered under medicare. >> the other aspect of that is that america's not so inhumane that, at the end, when they need -- desperate, they do get into a hospital, but because it's been delayed, the costs are larger, and then it gets shifted in the complicated accounting they have to somebody else. so, in fact, one of the reasons why we have such an inefficient healthcare system is that we don't provide healthcare to
large factions of the population. >> the amazing thing is that getting to a sort of universal healthcare system, despite the an -- absence of a public option, and the compromise made, it's not a big budget buster. they're able to pay for it with relatively minor cost savings and a little bit of extra taxation, and on balance, the health reform bill is actually going to reduce the budget deficit, not increase it. and it's not going to lead to huge burs on the public. that's going to be very much at stake. if obama is re-elected and this thing survives and america finally joins the community of civilized nation that provides some sort of health insurance to all their citizens, and if he loses, then it gets killed. >> commenting on things with which we're out of tune with the
rest of the advanced industrial countries sarkozy, came to columbia and gave a talk, and at the time that the healthcare bill was under discussion, and one of the students asked him to comment. he said i don't want to met until your -- meddle in your affairs, but -- and then he says, i don't understand it in france we take it as a basic right, a human right, that you should have access to health care. no matter what your income level is. so, for us, we just don't -- this is the question of the right and the left. this is basic human rights. and he just couldn't understand -- >> the olympic ceremony in britain with the dancing nurses where the people here said, what
is -- the british love their health care system. if you talk to people here, they think it's a hell hole and a disaster, but it's not. and by the way, one of -- again, the other thing about the politics is if we get it, it will become irreversible and people will say inconceivable -- >> it's like medicare, that most americans really think it's a good system. the joke in the debate about the obamacare was, a person who said, i want you to keep the government's hands off of medicare. and -- >> a lot of people were saying, don't let the government get its hands on medicare. >> yeah. that raises a fundamental issue we have been circling around, which is what is the role of government in our society and
our economy? and the -- for 30 years now, americans have been sold a bill of goods that government can't do anything well. >> it's the problem, not the solution. >> and, therefore, if medicare is successful, it can't be a government program. and in terms of social security, they find it very difficult to believe that the transaction costed associated with social security are a fraction of any private insurance company providing annuities and provides the kinds of insurance inflation, against other things you can't get in a private annuity. so, that really raises, i think, deeper issues that have been at the center of this --
>> there was a study down in oslo a couple years ago, the number of people par iting in the study. germany, the uk, the united states, and sweden, and they asked a battery of questions. and not surprisingly, the united states respondents distrusted government more than any other country, and the one question that stood out is, do i trust our government to protect me from policy interests? and the american's answer, no, was off the scale. ten or 15 points more. >> part of the reason for that may be related to the subject of inequality that we have been talking about. that -- and paul has written about this as well. we have such a high level of inequality, economic inequality, that inevitably it gets traps federal into political inequality, and particularly given the rules of the game. just like the rules of the
economic game determine how economic system plays out and leads to high level of inequality. we now have a political rules of the game, like citizens united, that give so much money that we have moved closer to a system rather than one person, one vote, to one dollar, one vote. and then that has become self-reinforcing, so you have more political inequality that generates laws and regulations that lead to more economic inequality, and that goes back into political inequality. the example i find astounding are something like our bankruptcy laws. something very technical. nobody normally gets interested in. one provision of the bankruptcy law is that when you go bankrupt, the question is, who gets paid first? that a big issue. the answer is, the derivatives.
not a surprise. because they put it in when everybody else was not noticing who pays attention to bankruptcy laws? what does that mean? that means you encourage that kind of economic activity. but at the other extreme, student loans can't be discharged even in bankruptcy. so, that means that the banks do well, but it really discourages people borrowing for student loans, and in a country where we have tuition going up, in the last three years, average state university tuition has gone up 40%, because of the cutbacks in state budgets. incomes are going down, the only way that people can afford it is borrowing, and then they realize that they get cheated, as a lot of them have been, particularly in the for-profit prices, result
of that is that if you don't get a job, given the recession, it's a noose around your neck. >> you're both teachers. what do you tell young people right now about tuition bills? and the unemployment levels for youth? >> the problem -- something like this problem -- such a rare rarefied but very -- it's -- >> it is the 1% or less, one-tenth of 1%, and to the extent that students are not the 1%, they have a pretty generous scholarship because the school has lot of money. so it's not a fair -- i certainly have young people, relatives, and who are urging them to find ways to not be
dependent and -- got a nephew, thank god, teaching english in japan so he has a job and urging him to stay there until the job markets bitter here. so this comes back -- we sort of moved off the question of the current depressed economy, but among other things, when people say, can we really afford to boost the economy? the cost of not doing that are, among other things, a lost generation of young people. terrible job market. you can people are coming out of school, out of college or even, if they choose not to good college, coming out of high school into a mark that has no use for them. they never gets the job that makes use of their potential, the never get on the ladder, and we're going to be paying a price for our inaction in the face of mast unemployment. we're going to be paying that price 30 years from now because of what we're doing to human
potential of this nation. >> paul is right. particularly, right now u.s. government can borrow at a negative real interest rate. the u.s. government. so, among other things, bonds are protected against inflation so they will not be eroded by inflation and interest on inflation protected bonds is 0.8%. so people have to pay the u.s. government to take their money. once you recognize that and you recognize we have these high return investments in technology, infrastructure, anybody looked at the infrastructure in new york, you had the feeling we're third world country. except that's an insult to third-world countries. investments in technology that would provide the basis -- we began talking about how we got out of the great depression. those investments would be a compliment to the private sector, and create jobs now and
promote growing in the future and improve our fiscal position, because you have these positive real returns and the negative real costs up front. and anybody looking at the balance sheets, you're crazy not to do it. >> the greatest city and the greatest nation in the world is linked to all points west by a single rail tunnel completed in the year 1910, and the project -- a long-standing project to add -- which runs at 100% of capacity during rush hour, and the long-standing project to add a second tunnel has been cancelled, at a time when the federal government can borrow at negative interest rates. >> and all of these idle resources do not pay taxes. people are worried about the -- >> larry summers and now that he
is a free man, larry is sounding more like joe and me, actually. they've had a paper, making a very strong persuasive case, that even in purely fiscal terms, spending more money now is a positive. and what it will do to the long-term u.s. technology growth with pay for itself in future tax revenue. the long-term shadow of mass unemployment on the economy is quite large. so, yes, -- and conversely, cutting back at times like this is self-defeating, it actually worsens the fiscal situation, of course then what happens is people say, well, got to inflict more pain. it really is like medieval doctors who treated illness by bleeding people, and they got sicker and you bled them more. and that's our policy decisions. >> i'm getting depressed. i have to turn to the audience.
people have questions. i believe microphones at a couple of places. please come up. we have time for questions. yes, sir? >> if i can make an observation before i pose my question. i appreciate the opportunity of hearing three brilliant people like yourselves discuss the issues. i suspect that if we had three equally distinguished economists of a different political persuasion we would have different answers and observations. so let me get to my question. number one, you think the problems of the 99% are the result of what the 1% are doing to them? the first question is, the problems of the 99% the result of what the 1% has done to them. secondly, what do you think the appropriate maximum tax rate should be on the highest incomes in society? and, three, how would you narrow the income differential between
the factory floor worker and the rowe crowe. 30 years ago the differential was 30 times and now today it's 500 times. and how would you go about narrowing the differential. i'm sure the differential occurred because china has brought down the wages of american factory workers. why ceos make what they make is an issue of governance. those three questions, if you can shed some light on them, your opinions. >> did the 1% cause the 99%'s problems? >> what i try to explain before is that the difficulties of the 99%, the middle -- are a result of a whole host of different things that we talked about. right now the major problem is unemployment. but education, a whole host of -- financial sector
deregulation allowing predator lening and abusive practices and things like that. now, you can say, a lot of these are a result of the way our political process passes rules and regulations in support of education, or not supported education. and that is affected by the way money -- the influence money has had in our political process. so, yes, a lot of their plight is as a result of that. i don't say all of it is. the issue of corporate -- the issue of the ceo pay relative to ordinary shareholders -- ordinary workers, a lot of that has to do with corporate governance. if we had stronger laws about say -- stay and pay, that would be curbed to some extent. >> different ratio here than in other countries. >> australia, for instance, has
a strong same pay law and it's a different ratio, and the companies are -- just as efficient as our companies are. >> also, a stronger labor movement. we have had a very heavy tilt of policy against the labor organizing and that's an important restraining factor. and that's the middle question. 73%. >> phil diamond, former colleague of mind and noble -- and deemed unqualified to be on the board. you don't have to take that exact number. but that's not out of a hat. but they were very strong economic argument that says that essentially we should be taxing very high incomes at rates that yields revenue. >> one more factor --
>> that's -- we don't know. it's above my pay grade, but -- >> if this book sells you might move up. >> clear, clear case. the notion that you need to keep tax rates at the top low because of these wonderful spillovers, it's just not right. at not born out by theory or evidence and much higher rates than we currently have at the high end would be perfect. >> we were talking about before and after 1980. after 1980, top taxes were 70%. one more thing that i would add, which is you ought to think about distortion of income at -- the source of income at the top, and you identify a lot of the source of income as monopoly power, all kinds of rent-seeking. if you can target taxes on that rent-seeking, you actually
generate income and improve economic efficiency. so most economists say to the extent you can actually target those kinds of rents, you have to tax that as close to 100% as you can. >> i sense that if you had a higher marginal tax rate at the top you would discourage the pursuit of rent-seeking. >> exactly. >> there's a fair bit of evidence, -- can't remember the name -- that one of the reasons why we have had this explosion of corporate pay, of executive pay, is that kind of brutal gaming of the system that crowes now do in order to get these very high paychecks. wasn't worth doing when the taxes were higher. so with the causality goes the opposite we -- the political progression leads to less taxation and a distorted
political system, and when you have less taxes you wind up with an economic system with more inequality because people find it worthwhile to try to game the system. >> over here. >> hello and. >> yes. >> so, there's been some criticism of the notion that economists as a group look at the world as if the only thing that matters is efficiency and seeking the so-called rational solutions to problems of inefficiency, and i'm getting the strong sense that the two of you are not exactly in that camp and there's some sort of moral code that is at least in part underpinning your work and your views, and i wonder if you could
articulate what that moral code is. a code for economists to live by. >> well -- [laughter] >> i don't think a moral code for a person is any different if you're an economist or anything else. you try to do -- i think -- let me answer a slightly different question, which is what is your social vision? what is it you want to see? i don't know -- joe was -- i think i am more or less -- relative notion was that you should think about society as if you were dividing the society without knowing who you were going to be within it. think of the hypothetical of the veil of ignorance. if i didn't know if i was going
to be born the son of a corporate executive or the son of a might grant -- migrant worker, what type of society would i look for given that it's uncertain. and it's a little bit like a golden rule sort of thing. just consider the possibility of what would you want if you were going to be someone else? and that's -- don't have to be super formal about it. that's a great line, saying that -- one of our two presidential candidates, has a social philosophy that starts on the veil or arrogance. >> let me add other thing. some of the arguments we have been talking about this evening say that no matter what your view about your moral philosophy is, that the level of inequality that we have achieved in the united states is bad for almost
all of us. that we've actually pushed the boundary beyond the point of where all of us in a way -- will suffer. so if we thought about this in terms of our enlightened self-interest, the 1% thought about their self-interest, they would realize it's not probably in their interest. >> one long-term study on education and socioeconomic status i always think of in this context. in america right now -- they looked at students by test score and socioeconomic backgrounds and then tracked them a number of years. turns out in america right now basically a dumb rich kid is more likely to graduate college than a poor smart kid. that is telling about the enormous waste of huge potential, there are probably ten office millions of young americans who could be doing great things for themselves and for the rest of us, who, because
we have such an unequal society, where they're being denied the chance. >> the notion that you can divorce equality of results from equality of opportunity, when the results are so unequal, it turns into an opportunity of wealth. >> a joint membership with the -- joe stiglitz was talking about miss book a month ago and we'll be filming that for our web site, and the gentleman who asked the question, i'll get you an invitation to the next session, which is talking about the formation of identity on november 28th. question? >> as i look at the last decade, i see -- under the bush
administration, a roughly comparable amount under the obama administration. this 10 dribble seems seems to a leg say leg say -- and -- this is the point at which, at least in europe, investors have begun to question the capacity of the country to repay the debt. so i'm curious in what way future funding would be -- would be posted as a solution to problems that the pacifism past -- past pump fining was not and how can it be financed. >> i don't buy the premise, first of all. look, we had a stimulus bill which was about 800 billion. that a very small part of the
debt we have. none of it was a result of the economic stimulus. so where is this coming from? the rest of it is we have large amount of debt that was -- a large opt -- we ran deficits even during good years, which even people like myself don't think is a good idea. why? because george bush wanted to give tax cuts to high income individuals and have a couple of unfunded wars. that has nothing to do with pump priming. the enwe had a collapse of revenue that took place after 2007, which is the result of a severe downturn and financial crisis, which reflects at least in part, at least in part financial deregulation, a failure to understand you need to have some oversight on the financial system. so, the notion -- we've got our
current level of debt through keynesian policies. we didn't. we got to our current level of debt through a combination of more or less a deliberate policy of starving the beast, when the economy didn't need a budget deficit. coupled with mishandling of financial policies that helped create this economic crisis. all of that said, the notion that there's -- that bad things happen -- there's some red line on debt that we're somewhere close to is not born out by the evidence. a really poor piece -- look at who is in trouble right now in terms of debt, and it turns out to be only, only countries that are no longer have their own currencies, and that's a special problem. there are countries that still have their own currency and monetary independence, have repeatedly been able to daniel
levels like we have. >> this has been debated bay well-known book -- >> that's very important. it's a wonderful book bat history of crises. and then after the book they threw out this very casual paper which was just some raw correlations saying that countries with high debt, seem to have low growth. if you look at it. , looks like it's actually the other way around. countries with low growth have high debt. it doesn't add up. >> the united states had a debt gdp ratio at the end of world war ii at 130%. and it was followed by the highest period of economic growth that we had, and we brought the debt down relatively quickly. so, this notion that there is a magic number at which there's a
problem is just false. the way you should have -- could have asked the question is, what would have happened -- >> teacher. >> what -- a really good question -- what would have happened if we hadn't allowed the deficit to increase. we try to do the herbert hoofer kind of -- herbert hoover policy of slash, slash, and tax revenue went down. we did that experiment. and forced that experiment on a number of other countries, and europe has been forcing that on greece, and we found two things about that. one, the countries go into depression, and the other one is, the deficit doesn't get down as much as anybody hopes. they keep saying, oversupply.
i'm surprised they're surprised. because it was perfectly anticipated they would fail. >> hello. thank you for the opportunity of asking this question. my question is, on a different topic. but it relates to the kinds of economic ideas that some u.s. groups have been promoting. i'm an international student from georgia, and this summer i went back and went to an economics camp which surprisingly was funded by the tea party organization, and they were promoting libertarianism, and there has been an emergence of or dough though docks economists back home which has led to deregulation, less taxes and also increased inequality. so my question is, how do you discussion discuss alternatives to countries which are so
sensitive to this -- to their historical currency. >> i -- which country? >> georgia. >> well, part of it -- it's not a surprise that people in countries where there was excessive government intervention, like -- would react by going to the other extreme. and that sense i'm not surprised. but hopefully -- and particularly, there's a real risk to go from one orthodoxy, fundamentalism to another kind of orthodoxy, fundamentalism, and i hope that one of the things i am trying to do is try to say, look, market fundamentalism doesn't work, just like the kind of marxism doesn't work. you need to have a balanced world and the convoluted things
we talk about are the roles that government can play that we don't have to pick up the theme of paul's book. you don't have to accept the reception. the libertarian says let the market work. don't do anything, just let -- instead -- just let the ashes burn and out of -- there's one ad in the "new york times" who says this, from chicago, the markets have their way, they're all glass and out of the ashes will come the new economy. meanwhile, there's going to be a lot of suffering. >> h. rapp brown. >> burn, baby, burn. >> they didn't think to say -- it's a little narrower than that. we've now been almost five years into this crisis, and different
the blog a little bit earlier it is more flexible wages, no unions. the economy is going to perform better. and the countries in which the stronger union and better job protection done better in responding to the crisis. the best country in terms of labor market. what's interesting from the point of view of economics, economic theory is this crisis has been wonderful. doing that to test it processes. it's shutting a lot of light on a lot of different issues at a
good cause to a lot of people in a lot of these countries. >> this is the question addressed to both of you. what is your view on the standardization dear subject to it, expected utility in economics? does it describe reality? especially considering experiences in international economics and a semester intervention and other related matters. [laughter] [inaudible] [laughter] seatback a lot is built around the notion of this idealized home economics, the rational man who's got utility, really a
clear ordering of preferences and which you can sometimes express the mathematical function that makes rational decisions given all of that which obviously is not a literal description of anybody. it is a metaphor that is hopeful for organizing and the way to do it is in the subjunctive. if that were the case to offer you guidance. any economist who believes those suspected utility making is a literal description of how people make decisions, probably should find another profession. but it nonetheless is very useful. >> there are two parts of the
question. one of them as there is a lot of research over the last 30 years that show people's behavior, making decisions under uncertainty is not well described by the model that paula and you mentioned, that there are significant deviations of behavior from the prediction of that model. on the other hand, when we think about -- the issue is with a probability come from. are they objective are the subjective? the view that we ought to think of them as relatively subjective , that our experience is the way we see the world,
based on her experience. i think that leads to a lot of persuasion that to the extent that we use those probabilities, then the subject of approach makes a lot of sense. >> wormer question over here. >> hi, thanks for coming. as discussed earlier, the united states was able to get out of the great depression by government spending because of world war ii and on manufacturing any letters in spirit but currently we were already at war and the manufacturing and keeping the united states is drastically different and it weighs 70 years ago. in light of those two points, which he directs this government spending? >> i was precluded this question now, the good names is that
there are some -- there are some natural recuperative for sincerity of work. so we had very few houses in this country for six years now. so there is no longer access housing stock probably. we would probably have a shortage. you can see houses starting to come back. household debt is down. it is still high, but not as much. a lot of reasons to think that the economy is somewhat on the mend. actually if you look the last year has been significant improvement in labor markets. so the point is that the that needs to be kind is not as steep as it was. you don't have to have a world war ii level stimulus to get us back to a much, much better economic situation in the kind
of stimulus you do want, a lot can be achieved by reversing this austerity that we have in fact carried out. so we are down 600,000 government jobs, mostly state and local, when a normal growth we should be a million. so right there you can create a lot of -- you can create 1.6 million, 1.7 million jobs, including direct effects, probably to enhance alien or more by instantly restoring normal levels of funding for schools, for road construction, for road repair, for the functions of government we are to have. we don't need to find exotic products. we don't need to find something unprecedented to spend on. just returning under normal operation skit says well below 7%. so it's not hard.
>> i think ticket that to full employment, we will need to do more than that. if you look at that comparison of where we were in 2007 and where we are likely to be, we won't have anything like we had before because we were irrationally exuberant. we won't have consumption like we had before. a zero savings rate, whether it's five, six, it's still going to be where we were. and we are going to continue to have a problem of the trade deficit almost yearly. that's how things change very dramatically. so the good news is we have lots of things we need to invest in. education, infrastructure, global warming. there are lots of needs that we have, so in my mind, typically
we can borrow now with negative interest rate. we don't need to do anything exotic. there is really, let him make another point differently. this view that it was more spending that got us out. more spending is not any different except in one way, you don't have anything left over after you drop those bombs, whereas if you actually go you have something left over. even if you don't do it perfectly, it's better to have more spending. the fact is all this spending would put us in a better step in this study we had to do in world war ii. >> i'm running short on time here and my staff i mean.
they said you you're too great original thinkers and noble laureates on stage with you. rob, give them the wheel. the last question for the institute of new economic thinking. what new economic thinking do you think we should pursue to develop and enhance? questions for each one of you. >> well, parties you really want to ask the question of the younger guys. there is this prop up of having been in it so long you have your own that way of thinking. but look, i think we need a lot more -- a lot more empirical work. a lot more evident space. we are seeing a renaissance. were actually seen a lot of really good empirical work on the fiscal policy, which was much neglected probably because
it didn't seem to be a live issue, but also because we have this crippling orthodoxy of believing everything must be derived from rational behavior of individuals and if you can't derive that we must not exist. if we adaptively surgery to become a open-minded way of approaching how the economy works, we open the door -- i don't think we are ready for the auto series. i think we have an opportunity to look at how things actually work. what happens in a recovery? what happens in spinning this increase for cuts. we get a lot of national experiments. but times are good for interesting data. >> history. one was the economy blog that
said new economic thinking seems to consist in large part of old books. there's a lot of forgetting. but we have learned that history is a really powerful tool than in some ways. it was empirical work in economics was being dictated by the data easy to get and clean in modern times. but it turns out a lot of the interesting events are further afield. international, there is a tendency to have two do economic research is if america was the only country. the principles do tend to stay
the same across time and across space. not everywhere, but if we had paid more attention -- if we paid more attention to japan, we wouldn't be doing such a bad job here right now. >> i don't know where to begin. it would take a couple of hours for new economic thinking. i agree very strongly with paul that there needs to be more openness in a way that economics is approached. i'm not sure whether the really relevant focus ought to be on empirics. a lot is the theory that was brought to bear in seeing the world, rather than to look at
the world, there are for 25 years, 30 years there has been a lot of empirical work in economics driven with a view that markets are rational, rational expectations. they have this very strong lens and anything outside the lab somehow couldn't see. the sheets on the empirics into that frame. there is a at harvard who has been writing a paper saying there's this notion that he somehow austerity these two economic growth. >> best buy we've had a triumph
because they look hard at the evidence. but we learned something there. >> was seems to me what is really important is changing the mind that with which we approach the data in the way we see the world. within the different views of economics come it seems to me very clear that the field that is done miserably is macroeconomics and monetary economics. and to a somewhat lesser extent, financial economics repeal to macroeconomics to see the bubbles don't exist, that markets are efficient. it was really the central doctrine of a very large fraction of the macroeconomic profession. it is used by central banks
that's really peculiar. how can central bank actually talk about macroeconomics? well, they did. the predictions were very bad and the ability to respond to the crisis was not very good. what happened, they would make statements that the crisis is contained when it obviously wasn't. so in my mind, as we look across the field, the big failure was in macroeconomics, and finance with financial markets will be sufficient properties and a lot of people actually believe those models. those with a big mistake, both the public and private sector with an enormous consequence. >> it if you did read the sold relics, the odd thing is you had
a view of macroeconomics based on what was widely accepted knowledge before the super rational expectation came in. it eventually does spectacularly well in this crisis. obviously i think of myself as one of the people who did that, that came in with things that seemed absurd to a lot of people. the notion that it would not drive the infrastructure, big increases as the monetary base would not be inflationary, that this would in fact be much slower recovery. all series of propositions which turns out in a funny way this has been a period of triumph or macroeconomic theory except that the macroeconomic erie about the profession in a way that was still perfectly valid.
>> what you mentioned about economic history, the notion that there were no bubbles was really quite remarkable because anybody who had read as i had come a lot of my teachers who wrote this wonderful about the history of panax. and it happened since the the beginning of capitalism. one of the things that's so interesting in this book as he describes in each of these bubbles, but the people in the boom knew there had been previous bubbles that broke, but they thought they were smarter than their parents and they themselves were not in one of these bubbles. that was exactly what happened in this case, that a few of the people in the middle of the bubble would say yes, of course back in the middle ages 20 years ago we had a pulse, but we are
so much smarter than our parents and grandparents and great grandparents. silly but never fall for the kinds of things they sell for. of course we fell for things they were just a little more complicated but in many ways very similar to the same kinds of traps they fell into from bernie madoff of the way to more sophisticated things. >> so i'll take from this concluding question a notion that we should try to inoculate people from the position that they only see what they believe. we should try to bring them back to believe that which they see. >> if not, a little bit of humility is a very powerful thing. see what a humble person i am.
but no, excepting the maybe you don't have the truth with two capital to use. maybe this beautiful model you've been teaching are not the only way to see the world. we have this tremendous step or nurse about backdoor economics. amazing without any empirical triumphs to justify it. intellectual arrogance -- >> what is quite remarkable if some of the case that those models that fill so that they have actually written that this is the area, even now the triumph of macroeconomics. so what it shows is some parts of economics are immune to
reality and they are a religion, not a science. hopefully inet will be lit to make its 10th in that kind of armor. >> and those people will never admit that they were wrong, but that's the, for light reading and reading about the development of quantum theory. [inaudible] [laughter] [applause] but i think tonight -- i think tonight you brought a pot of late to this audience, to the questions of economics, the challenge behind it. i'm grateful to you both for the national discussion. thank you all for being here.
[applause] >> we can remember burke obama speech in 2004. the democratic national convention come of this masterpiece that makes him a figure in four years later is not a candidate for presidency. he is a dazzling speech where it is a beautiful testament to the quality of lincoln's mind, the research he does come with a logical argument. it's a fantastic speech. but when he ran for the senate, barack obama gave a speech he was running for the senate in illinois and he won. abraham lincoln ran for the senate in illinois and he lost. you want to think about abraham lincoln in 1860, think about running for the presidency in
2008 if he had lost the illinois senate election, not if you wanted. that's the level of national security are talking about here. >> where you're the author journalist fergus bordewich, author of "america's great debate: henry clay, stephen a. douglas, and the compromise that preserved the union." what was so great about the great compromise? >> well, most of us if we don't know anything about the compromise. the vaguest recollection from junior high school said there was a crisis in 1850. the nature of the crisis was this. the country went to the brink of civil war. most of the political culture and most americans that war was going to take place, that the
deep south was going to succeed and they were much closer to succession than most americans even today realized. certainly the deep south states. texas was arming. other southern states to texas. why am i talking about texas? had there been a collision? headwear began in 1850, when it begun in charleston, would've begun in santa fe, new mexico. why? because texas with its own imperial ambitions to move westward in the slaveowning south aim to invade new mexico territory. there were many come in many other parts of the crisis fundamentally whether or not so much of the slaves in 1850 the south was militarized. southern nationalism was at a peak. jefferson davis on the florida senate in the 1850s santa fe southern confederacy was to be for now, it was ready to accept
the presidency of it in 1850. the north and the other hand was nowhere to be ready to go to war and indeed the north still dominated by the conservative wing of the democratic party alliance largely with the south. in other words, the north would not have fought the war were certainly would've thought the same or. secession would probably have succeeded in the consequences of that, not only for american history, but the rest of the world could've been quite tragic. >> was the floor of congress like in 1850? >> it was tumultuous, chaotic, and tends. the debate in congress was like the world series today. of course there was no sports culture and the mid-19th
century. politics is the great american sport. americans came from all over the country to attend debates, especially when the great titans like henry clay and daniel webster and john c. calhoun and others were debating. but imagine a much smaller set of chamber crowded re-theme of cigar smoke, smelling of gas from gas lamps, carpets with spittoons scattered here and there, often missing and an intense, congested, mono and mono and the gladiatorial arena of 19th century everyman.
>> henry clay and stephen douglas. what was the role the compromise? >> he was called out of retirement in kentucky and to take charge of an attempt to create some kind of a compromise. >> he was known as the great compromise server has sprinting the 1820 and also the 1833 compromise to rock the country back for the crisis over south carolina's nullification. henry clay was a grand remarkable man and never wanted to say no when he was invited to be the center of political attention so he returned to action and let the debate for seven months, to persuade congressmen from the right, left, south and north to agree to a grand compromise, a grand
bargain that was the slavery question once and for all. he failed. henry clay was pivotal to debate, but he failed and actually made the compromise real. he had put together one of the first omnibus bills in american political history. the omnibus collapsed. what happened? stephena douglas known to journalists at this time of the steam engine and riches, very short, ferocious northern democrat from the youngest man in the senate 35 years old at the marco rubio of the estate perhaps due to a clay not done. in other words there is enough conversation, so he passed using
different combinations. so the lesson is really persuasion is necessary for the data file, but if you don't get the numbers, you'll persuade and these two men together. >> you are speaking with fergus bordewich, author of "america's great debate: henry clay, stephen a. douglas, and the compromise that preserved the union." thank you. >> thank you.